How to understand your letter regarding the granting of student grants

When it comes to college, students these days worry more about paying the bill than getting in, according to a recent survey of college students and their families.

College education already costs more than most families can afford, and college costs continue to rise. Tuition and fees plus room and board for a four-year private college averaged $53,430 in the 2022-2023 school year; at four-year state public colleges, it was $23,250, according to the College Board.

For most students and their families, the choice of college depends on the amount of financial aid offered, as indicated in each school’s financial aid letter.

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One of the first things to understand when evaluating support letters is the formula colleges use to determine expected family contribution.

“It’s not so much about what you can afford as it is about what you can afford to fund,” said Kalman Chany, a financial aid advisor and author of The Princeton Review’s “Paying for College.”

Chany advises families to wait until all offers are available and then compare. What may seem like the biggest offering may not be the best, he said.

“A school might give you $5,000 more grant, but their cost might be $8,000 more.”

Furthermore, not all colleges include both direct and indirect expenses in the total “Cost of Attendance”.

While most schools outline basic tuition and fees, and room and board, some may not include “indirect expenses” such as textbooks, supplies, transportation, and other extras. For each school, list all expenses, including personal expenses, before deducting any grants or scholarships.

As a rule of thumb, add an additional $4,000 for those indirect costs if they’re not included in the aid offer, Chany said.

“You have to look at the network,” he said.

Multiple financial aid options are often included in most scholarship letters, including grants, scholarships, work study opportunities, and student loans.

If you’re having trouble telling the difference between a grant and a loan that needs to be repaid, search for terms like “grant,” “bursary,” and “bursaries.” Anything else is most likely a loan.

When student loans are listed, they appear to reduce the overall cost of participation. But the reality is that loans always have to be paid back – plus interest.

Conditions may also apply to donations, e.g. B. whether a scholarship can be extended for every four years or whether a minimum grade point average must be observed. A school that appears more generous initially may also offer less funding later on, Chany said.

Schools often end up offering more financial aid than you need, especially with loans.

In general, most experts say you shouldn’t borrow more than is absolutely necessary. Many people make the mistake of borrowing too much and later struggle to repay.

Even if you haven’t applied for financial assistance, “it’s not too late,” said Mary Jo Terry, a managing partner at Yrefy, a private student loan refinance firm.

In normal years, high school seniors miss out on billions in federal grants by not completing the Free Federal Student Assistance Application (FAFSA). Many families mistakenly assume they won’t qualify and don’t even bother to apply.

As of March 2023, only 42.7% of the high school class of 2023 had completed the FAFSA, according to the National College Attainment Network.

The FAFSA season for the 2023-24 academic year opened on October 1, but students who have not yet registered can still apply.

For families who have already submitted the FAFSA but are still concerned about making ends meet, it is also possible to amend their FAFSA form or contact the college’s financial aid office for further help, particularly if you are making an amendment to found out about your financial situation. like a job loss or a disability, Chany said.

Financial aid is determined by income information, which is not necessarily current. For example, the grant for the 2023-24 academic year is based on 2021 income.

If your circumstances are now different, the aid office should be informed of this with documents.

Prepare a response with documentation showing any changes in assets, income, benefits, or expenses. If another comparable school’s financial aid package was better, it is also worth documenting this in an appeal.

“Syrupy” letters aren’t as effective as a more quantitative approach, Chany advised.

“This is a business transaction,” he said. “They’re trying to meet their enrollment goals and maintain their income.”

To that end, “play hard to get,” he added. Do not post wearing the school sweatshirt on social media or take steps to indicate that you will be enrolled anyway.

Colleges are likely to be receptive to appeals, Chany said, but “it’s not a buyer’s market like it was when the pandemic started.”

In the meantime, explore alternative sources of merit-based help, Terry advised. “There’s so much money out there that people don’t even know is available.”

According to higher education expert Mark Kantrowitz, there are more than 1.7 million private scholarships and grants available, often funded by foundations, corporations, and other independent organizations, totaling more than $7.4 billion.

“Every 40 hours you spend applying for scholarships and grants will make you an average of $10,000,” calculated Yrefy’s Terry.

Check with the college or ask your high school counselor about options. You can also search sites like Scholarships.com and the College Board.

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